Residential Rental Properties

Each city or area has a policy that may impact your rental homes. Here is a look at the one in Glendale Arizona.

All About Glendale’s  Ordinance on Residential Rental Properties

When was the initial residential rental tax adopted in the Model City Tax Code and what changes were made?
The residential rental tax was adopted with the Model City Tax Code in 1988. The number of exemptions was raised to four units within the city by Ordinance on July 27, 1989.

When was the current change adopted?
The Glendale City Council adopted the current change on July 8, 2003 (per Ordinance No. 2328) with an effective date of Sept. 1, 2003. Landlords who own one or more residential rental properties will be required to get a sales tax license for $50. Only one license is required for any number of dwelling units owned by the same person. Previously, the ordinance applied to those who owned five or more residential rental units.

What is the current rule?
The change will equalize the residential rental exemption with that of the current commercial property exemption and make all rental units in Glendale taxable.
The change will require affected property owners to obtain a license and file/pay sales tax on rental income.
It will provide Code Compliance with a more accurate accounting of all rental properties to enhance enforcement of the Residential Property Code.
 

What is the license requirement?
License fee due for 2003 – $25 – September is the last month of the third quarter.
Annual renewal fee due January 31stof each year – $50.

Will owners of multiple locations be allowed to file on one license?
Yes, it is allowed per Section 21.1-305(e) of the Glendale City Code.

What would be required with the license application?
A list of location(s) and the number of units per location has to be submitted with the license application.

What is the city’s compliance procedure?
New licenses filed under this code change will be matched with the rental property database obtained from Maricopa County. Those that are listed by Maricopa County as owning residential rental property and who are not licensed with Glendale, will be notified that a license is required and sales tax is due.

If a landlord lives in Glendale, but owns rental property outside of Glendale city limits, do they still need a Glendale sales tax license?
No. If the residential property is outside of Glendale, they do not need a license. They should, however, check with the city where the rentals are located for licensing requirements.

What do I do with my current lease?
Most leases should have a clause that states the lessee will pay the rent, utilities (if any) and any applicable taxes due. If you are unsure what information your contract contains, please seek the appropriate advise from your accountant or legal services.

Previously, was any residential rental owner required to remit sales tax on the first residential rental unit?
Yes. If a residential rental property owner also owned any commercial rental property, the owner was required to collect and remit sales tax on all rental property.

Who can I call for more information?
The Tax & License Division is coordinating the implementation of this change. The phone number for general questions during business hours is (623) 930-3190.

More detailed questions and direct service for internal use is being handled by Bill Bond, Tax and License Manager at (623) 930-2216.